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Personalised comparison rate calculator

29 October 2018

Learn the true value of any home loan product with a personalised comparison rate calculator.

We all know how important interest rates are when it comes to home loans, but there’s another rate you should always look at before you choose a mortgage. It’s called the comparison rate and it’s a more accurate representation of the actual cost of a home loan.

The comparison rate takes into account the interest rate and a range of fees and charges that apply to a loan, and is represented as a percentage figure. It was introduced as a way to stop lenders advertising a great low interest rate for their loan and then slugging borrowers with a whole bunch of hidden fees.

How can I compare home loans using the comparison rate?

Shopping around for home loans can be a daunting process with various numbers, percentages and technical terms thrown around to confuse borrowers.

In the past, unscrupulous lenders would lure in borrowers with an interest rate that was too good to be true, and the borrower wouldn’t realise that there was a range of fees and charges attached to the loan.

The end result was people having to manage unexpected application, establishment and ongoing loan fees, meaning they were taking out loans that were much more expensive than they thought.. In an effort to put a stop to this, the Australian government introduced the comparison rate as a mandatory requirement to show the true cost of a mortgage.

Lenders must show the comparison rate whenever they advertise a home loan, so look past the interest rate to see this all-important figure. You’ll then be able to see how the comparison rates of different home loans stack up against one another, giving you a better idea as to which loan is the most affordable.

However, the comparison rate is not without faults. A comparison rate can only use a certain number of examples, and in the case of home loans this is usually a $150,000 loan taken out over a 25-year loan term. This means for any loans larger than this, the comparison rate provided by lenders won’t be as helpful, it at all.

This is why it’s so important to use a personalised comparison rate calculator.

How to use the personalised comparison rate calculator

The finder.com.au personalised comparison rate calculator is easy and intuitive to use. While the actual formula used to work out a comparison rate is quite complex, the calculator makes it simple for you to see how a number of loans compare to one another; all you’ll have to do is key in a few important details.

You’ll need to provide:

Loan term

Loan amount

The fixed interest rate and fixed period (if you’re opting for a fixed rate loan)

The ongoing rate

Upfront fees

Ongoing monthly or annual fees

Loan discharge fee

Once you’ve entered all the relevant details simply click ‘Calculate’ to be presented with the comparison rate for your loan. You’ll also be presented with your regular repayment amounts, a figure that represents the total amount of repayments you will need to make towards your loan, and a handy graph that demonstrates how long it will take you to pay off the interest and the principal amount on your mortgage.

The finder.com.au personalised comparison rate calculator is a useful tool for borrowers and can help you get a clear picture of how much your loan will cost you on an ongoing basis and over its entire term. If you’re looking to compare a range of loans, the calculator can help you cut through the advertising campaigns and promotional offers to discover how much a loan is really worth.

Of course, you should also keep in mind that certain fees - including redraw fees, stamp duty costs and early termination fees - are not included in a comparison rate. In addition, you should consider other factors when choosing a home loan, including things like flexible repayment options, redraw facilities, linked financial products, the reputability of a lender and more when choosing a home loan.

So if you want to see the real cost of a loan that matches your exact borrowing requirements, put the finder.com.au personalised comparison rate calculator to use today.

Disclaimer - Hive Empire Pty Ltd (trading as finder.com.au, ABN: 18 118 785 121) provides factual information, general advice and services on financial products as a Corporate Authorised Representative (432664) of Advice Evolution Pty Ltd AFSL 342880. Please refer to our FSG - Financial Products. We also provide general advice on credit products under our own Credit Licence ACL 385509. Please refer to our Credit Guide for more information. We can also provide you with general advice and factual information on about a range of other products, services and providers. We are also a Corporate Authorised Representative of Countrywide Tolstrup Financial Services Group Pty Ltd. ABN 51 586 953 292 AFSL 244436 for the provision of general insurance products. Please refer to our FSG - General Insurance. We hope that the information and general advice we can provide will help you make a more informed decision. We are not owned by any Bank or Insurer and we are not a product issuer or a credit provider. Although we cover a wide range of products, providers and services we don't cover every product, provider or service available in the market so there may be other options available to you. We also don't recommend specific products, services or providers. If you decide to apply for a product or service through our website you will be dealing directly with the provider of that product or service and not with us. We endeavour to ensure that the information on this site is current and accurate but you should confirm any information with the product or service provider and read the information they can provide. If you are unsure you should get independent advice before you apply for any product or commit to any plan. (c) 2018.

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Important information about this website

finder.com.au is one of Australia's leading comparison websites. We compare from a wide set of major banks, insurers and product issuers.

finder.com.au has access to track details from the product issuers listed on our sites. Although we provide information on the products offered by a wide range of issuers, we don't cover every available product. You should consider whether the products featured on our site are appropriate for your needs and seek independent advice if you have any questions.

Products marked as 'Promoted' or "Advertisement" are prominently displayed either as a result of a commercial advertising arrangement or to highlight a particular product, provider or feature. Finder may receive remuneration from the Provider if you click on the related link, purchase or enquire about the product. Finder's decision to show a 'promoted' product is neither a recommendation that the product is appropriate for you nor an indication that the product is the best in its category. We encourage you to use the tools and information we provide to compare your options and find the best option for you.

The identification of a group of products, as 'Top' or 'Best' is a reflection of user preferences based on current website data. On a regular basis, analytics drive the creation of a list of popular products. Where these products are grouped, they appear in no particular order.

Where our site links to particular products or displays 'Go to site' buttons, we may receive a commission, referral fee or payment.

We try to take an open and transparent approach and provide a broad based comparison service. However, you should be aware that while we are an independently owned service, our comparison service does not include all providers or all products available in the market.

Some product issuers may provide products or offer services through multiple brands, associated companies or different labelling arrangements. This can make it difficult for consumers to compare alternatives or identify the companies behind the products. However, we aim to provide information to enable consumers to understand these issues.

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